Social Velocity » Earned Income

Stop Rolling the Nonprofit Fundraising Dice

Nell Edgington — Mon, 08 Apr 2013 14:17:50 +0000

It happens all too often. A nonprofit executive director called me the other day because they have just completed a beautiful strategic plan with some exciting goals and a new direction for the organization, but they don’t know how to bring the money in the door to make the plan a reality. They don’t have a financing plan for their nonprofit, so they are just hoping for the best.

A financing plan galvanizes board and staff to bring enough of the right kinds of money in the door to make the organization’s goals a reality. It creates a sustainable financial model for the nonprofit so that it can survive and thrive. Instead of rolling the dice and hoping for the best, a financing plan puts your nonprofit’s financial destiny squarely in your control.

But very few nonprofits have a financing plan. Which is why I’m excited to be offering one of my most popular webinars again this month. In the April 24th Creating a Financing Plan webinar I will take you step-by-step through what a financing plan looks like and how to create one for your nonprofit. If you truly want to break free from the exhausting hamster wheel of fundraising and start bringing enough money in the door to achieve your goals, you need a financing plan.

The Creating a Financing webinar will help you create an overall financing plan for your nonprofit, which includes:

All revenue streams flowing to the organization
A strategy for funding programs and operations
Opportunities to raise money for infrastructure
Tactical steps with activities, deliverables, people responsible
Ways to divide tasks by staff and board members
A process for monitoring the plan going forward

Here’s what some past Creating a Financing Plan webinar participants have said:

“This session was one of the best on this topic I have seen…presented in an excellent and logical manner.”

“I loved the reframing of financing for desired results instead of funding for operations… your message to wed money to the mission was a big AHA moment and I am now figuring out how to bring this to life for staff and Board.”

Creating a Financing Plan Webinar
Wednesday, April 24th, 2013
1:00-2:00pm Eastern
Register Now

And remember, as with all of our webinars, if you can’t make this day and time, don’t worry. When you register for the webinar you will gain access to the slides and recording of the webinar which you can watch whenever you want.

I hope to see you there!

Photo Credit: jDevaun

About the Author: Nell Edgington is President of Social Velocity (www.socialvelocity.net), a management consulting firm leading nonprofits to greater social impact and financial sustainability. Social Velocity helps nonprofits grow their programs, bring more money in the door, and use resources more effectively. For more information, check out Social Velocity consulting services and clients.

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Financing Not Fundraising: Find and Keep a Great Fundraiser

Nell Edgington — Wed, 23 Jan 2013 14:14:34 +0000

The news is not good lately about how effective the head fundraiser is at nonprofit organizations. A new study by CompassPoint reveals some startling realities about the fundraiser role in the nonprofit sector:

25% of executive directors fired their last development director
33% of executive directors are lukewarm about their current development director
More than 50% of executive directors say they can’t find well-qualified fundraisers
50% of development directors plan to leave within the next two years
And 40% plan to leave fundraising altogether

That sounds like a fundraising crisis to me. And it’s just another example of why fundraising in the nonprofit sector is broken. So in today’s installment of my regular Financing Not Fundraising blog series, I’m talking about how to find and keep a great fundraiser.

If you’re new to this series, Financing Not Fundraising recognizes that fundraising in the nonprofit sector just doesn’t work anymore. Nonprofits have to break out of the narrow view that traditional FUNDRAISING (individual donor appeals, events, foundation grants) will completely fund all of their activities and instead work to create a broader approach to securing the overall FINANCING necessary to create social change. You can read the entire series here.

What I find most troubling about CompassPoint’s recent study is that it makes nonprofits sound so powerless to do anything about this deep dissatisfaction with fundraising performance. But I think it’s not staff, board or donors who are lacking, rather it’s the entire fundraising approach.

Here is how to go about finding and keeping a great fundraiser.

Hire a Money Head. Don’t hire someone who can just write grants or someone who can just work with individual donors. Take a look at the entire financial engine of your organization and hire someone who can develop and execute a strategy for strengthening and growing ALL aspects of that financial engine. If you have significant government grants or earned income, make sure you have someone on board who understands and can work with those aspects as well as the private money that flows to the organization.

Develop a Financing Plan. Don’t just expect to hire someone who will magically make money appear. Your head fundraiser has to be in charge of developing and executing an overall financing strategy for your organization. And that means that you need an overall financing strategy for your organization. Without a strategy, your chief fundraiser and your nonprofit are sunk.

Pay a Real Salary. It amazes me how many nonprofits expect to entice a great fundraiser by offering a salary that is comparable to someone with only a few years of experience . If you don’t have the current budget to pay a market rate, raise capacity capital to fund the first 1-2 years of the position. Once you have a great fundraiser on board he will raise his own salary while growing your nonprofit’s overall revenue.

Work WITH Them. It drives me crazy how many times a nonprofit’s lone fundraiser is trying to raise all the money by herself. If you are going to align mission and money, you have to make sure that EVERYONE in the organization (board and staff) understand their role in bringing money in the door. Create a culture of philanthropy among the staff so that even a staff member who doesn’t have dollar goals in her job description understands that talking to prospects and donors, giving tours, writing thank you notes are critical to keeping the organization going. And make sure the board is trained in fundraising, has a give/get requirement, and has specific individual and board money goals.

Hire Enough Fundraisers. The rule of thumb is that it takes one full time person to raise $500K, including anyone who touches prospects and donors (database manager, prospect researcher, etc). If you are asking a single fundraiser to raise $1.5 million there is little wonder why she is (and you are) miserable.

Give Them Tools. Don’t hire a great fundraiser and then fail to give him a donor database, an interactive website, marketing materials, prospect research, support. It does no good to hire someone with great ideas but no way to bring those ideas to fruition. If you don’t have the budget for additional support and tools, raise capacity capital to find it.

Train Them. No one knows it all. In every other profession we expect to send employees to conferences, provide them classes, coach them along the way. Don’t expect that your fundraiser automatically knows all there is to know. Give him opportunities to gain new knowledge, meet others in the field, and continue to grow his skills.

If you want to attract and retain someone who will develop a sustainable financial engine for your nonprofit, don’t leave her out in the cold. Fully integrate your head fundraiser into your organization and give her the tools, support and resources necessary to succeed.

If you want to move your nonprofit from fundraising to financing, check out the Financing Not Fundraising page of our website with articles, e-books and webinars to get you started. Or if you’d like to find out more about how I could help your nonprofit develop a financing plan or coach your fundraising staff to greater success, send me an email at nell@socialvelocity.net.

Photo Credit: Sahaja

Webinars to Kick Start Your 2013 Fundraising Plan

Nell Edgington — Wed, 09 Jan 2013 14:21:00 +0000

With the new year comes new year’s resolutions and one I’d love to see more nonprofits embrace is getting smarter about raising money. Imagine if more nonprofit leaders were to take a big step back and develop an overall financing strategy for their organizations that integrates money with their mission and allows them to play on their assets. In so doing, we could move away from a sector that struggles to get by.

To help you along in developing a smarter way to raise money in 2013 I’m offering two webinars this month.

Creating an Earned Income Stream Webinar
Recorded
Download Now

This webinar builds on the earlier Financing Not Fundraising: Evaluating Earned Income webinar and is intended for those nonprofits that have a business idea and are ready to pursue an earned income stream. This webinar, complete with case studies of other nonprofits that have launched earned income businesses, will show participants how to:

Pilot a new business idea
Find customers
Price products/services
Project future business income and expenses
Create goals for the business and monitor progress on them
Report progress on the business to the board

Next is a repeat of November’s sold out “Creating a Financing Plan” webinar:

Creating a Financing Plan Webinar
Recorded
Download Now

This webinar will help nonprofit leaders understand the steps to creating an overall financing plan for their organization that results in sustainable, long-term money coming in the door. Webinar participants will learn how to:

Set goals for ALL revenue streams flowing to the organization
Determine the infrastructure dollars they need to raise
Tie their financing plan to their strategic plan
Create tactical steps to make the plan a reality, with activities, deliverables, people responsible, timeline
Divide tasks by staff and board members
Develop ways to monitor and revise the plan going forward

And remember, all of our webinars are available as recordings right after the live webinar, so even if you can’t make the time of the live webinar, you can still register and have access to all of the content. The registration fee for any Social Velocity webinar will get you:

Access to the live, interactive webinar (live webinar only)
A link to a recording of the webinar, which you can watch as many times as you like
The PowerPoint slides from the webinar
The ability to ask additional follow-up questions after the webinar

You can see the complete list of all Social Velocity webinars here.

I hope to see you at one of these webinars!

Photo Credit: sylvester

Financing Not Fundraising: 7 Mistakes in Your Nonprofit’s Fundraising Plan

Nell Edgington — Wed, 17 Oct 2012 13:22:49 +0000

I can’t tell you how often I hear nonprofit leaders complain about how difficult it is to raise money, how tired they are of banging their head against the wall, how difficult this economy is. Well, there really is a better way. And it starts with a really good money plan for your organization. But again and again I see the same mistakes being made in nonprofit fundraising plans, which is the topic of today’s installment of our regular Financing Not Fundraising blog series.

If you’re new to the series, our Financing Not Fundraising blog series shows nonprofits how to break out of the narrow view that traditional FUNDRAISING (individual donor appeals, events, foundation grants) will completely fund all of their activities and instead work to create a broader approach to securing the overall FINANCING necessary to create social change. You can read the entire series here.

Here are the 7 mistakes to avoid in your fundraising plan:

Not Having A Plan At All. Yeah, not even having a plan is a huge mistake. It boggles my mind how many nonprofit organizations expect that money will magically appear at their doorstep. It takes an overall money strategy, what I call a Financing Plan, to effectively marshal your resources (staff, board, other volunteers, technology, materials) so that enough, and the right kind of, money comes in the door to achieve your goals.

Creating Just A One Year Plan. You cannot expect to create a financially sustainable organization if you are only planning for money one year at a time. Your financing plan should project at least 3-years into the future in order to ensure that you have sound financial footing from which to operate. A true financial strategy takes a long view and plans accordingly.

Including Only Private Dollars. Your money strategy must include ALL sources of money flowing to your organization, making it a Financing Plan. You cannot just plan for individual, corporate and foundation dollars, you also must plan for how government and earned income sources will flow, if they are appropriate to your model. And if you don’t have other sources of money beyond private dollars, you probably need to at least explore whether diversifying makes sense for your organization.

Not Connecting It to Your Strategic Plan. Ok, I’m going to assume that your nonprofit has a strategic plan, even though many nonprofits don’t have one or they have a poor one. But once you have a strategic plan in place, you have to connect your money strategy to that plan. What good is it to have lofty program goals if you have no idea what those goals will cost (expenses) and how you will raise the money to make them a reality (revenue). You must have a multi-year financing plan that directly relates to your multi-year strategic plan.

Ignoring Capital Goals. You can’t just raise revenue (the day-to-day money to keep the organization going), you also probably need capital (the money to build infrastructure, technology, systems) once in awhile. If you don’t include dollar goals for the amount of capacity capital your nonprofit needs, I doubt you will ever raise it. You cannot continue to operate with infrastructure, staffing, technology and systems that are inferior to your needs and goals. Determine how much capacity capital you need and include those goals in your financing plan.

Not Giving Your Board a Role. You cannot leave the burden of raising money solely on the shoulders of your staff. One of the key responsibilities of a nonprofit board of directors is to ensure the financial viability of the organization they serve. So this means that the board as a whole and each individual board member must understand and play a role in the money strategy of the organization. So start by requiring each board member to give and/or get a certain amount (usually your major donor level) and then make sure your board “money committee” is active and engaged, and finally integrate money into every meeting and conversation your board has. Money MUST be top of mind for the entire board.

Not Focusing On High Return Activities. Some fundraising plans include activities that a nonprofit has always done to bring money in the door without analyzing their effectiveness or expanding into new or more profitable activities. Start by analyzing the return of every money raising activity you engage in and then focus your money strategy on those that actually have a positive return.

I would love to see more nonprofits create a smart, long-term financing plan for their organizations. Because the reality is that those that do so will create more sustainable social change.

If you want to learn more about how to creating a financing plan for your nonprofit, sign up for our Creating a Financing Plan webinar.

And if you want to apply the other concepts of Financing Not Fundraising to your nonprofit, check out our Financing Not Fundraising Webinar Series, or download the 27-page Financing Not Fundraising e-book.

Photo Credit: Hiking Artist

Calling All Nonprofit Social Entrepreneurs

Nell Edgington — Thu, 04 Oct 2012 14:14:30 +0000

There is a really interesting research study about social entrepreneurs going on at the University of Massachusetts and you may want to join in.

John Walker, Finance Director at Echoing Green and Nardia Haigh, Assistant Professor of Management in the College of Management at UMass Boston are investigating social entrepreneurs who went through a process of deciding whether to establish their organization as a non-profit, a for-profit, or a hybrid. They want to understand the range of circumstances under which social entrepreneurs identify which type of business model fits best for different situations.

While they have already interviewed many for-profit social entrepreneurs, they are having a hard time finding nonprofit social entrepreneurs, which is where you come in.

If you are a social entrepreneur and struggled with the decision about whether to form a for-profit/nonprofit/hybrid entity, Nardia would like to interview you about your organization’s strategies, structure, and direction.

According to Nardia, there are many circumstances under which hybrid organizations are established, and to date, two distinct variations of the hybrid business model are evident: Multi-entity and Integrated:

Multi-entity hybrids link for-profit and nonprofit entities – often through contracts and/or ownership. A nonprofit may establish and own all or part of a for-profit subsidiary (e.g. Embrace and Embrace Innovations), or a for-profit may establish a nonprofit and provide it with equity or other means for it to derive non-discretionary revenue.

Integrated entities are either for-profit companies with a strong social or environmental mission deeply embedded within its business model (e.g. TOMS Shoes or Maggie’s Organics, and companies registered as L3Cs), or are nonprofit organizations that use for-profit methods to generate revenue (e.g. Ten Thousand Villages or Ecosia.org).

In this study, they seek to understand the decision-making process entrepreneurs go through in choosing which to pursue.

Nardia’s research at UMass Boston focuses on business models and strategies that address large-scale sustainability issues in positive ways. And John has significant experience as an entrepreneur, an executive, and as a board member in a range of industries, where he specializes in financial analysis, capital raising, and structuring acquisition and investment deals.

If you are a social entrepreneur and would like to participate in this research study, contact Nardia at Nardia.Haigh@umb.edu.

Nardia has promised to share the results of the study with Social Velocity readers when it’s completed. I can’t wait to hear what they find out.

Photo Credit: piermario

Fall Webinar Lineup for Nonprofit Leaders

Nell Edgington — Wed, 05 Sep 2012 13:55:44 +0000

I’m delighted to unveil the Social Velocity Fall Webinar Lineup. I received an amazing response to my call for webinar ideas last month with lots of really great ideas. Thanks so much to everyone who submitted an idea. Four lucky winners had their ideas chosen and will be receiving a free registration to the webinar they suggested.

Below is the lineup for this Fall. In addition to continuing to add to the Financing Not Fundraising webinar series, we are also adding other nonprofit management webinar topics. These include “Moving Beyond Your Nonprofit’s Founder” about overcoming founder’s syndrome and creating a succession plan for your organization, and “Leading Difficult Conversations with Funders, Board Members and Employees” that will help you be more assertive in telling people what they need to hear.

And remember if you can’t make the date or time of a live webinar, all of our webinars are available 24-7 as recorded webinars. So you can still sign up and get everything you would get if you could be there live. Similarly, don’t forget to check out our library of past webinars. You can see the entire list of upcoming and past webinars here.

When you register for a live or recorded webinar, you will receive:

Access to the live, interactive webinar (live webinars)
A link to a recording of the webinar, which you can watch as many times as you like
The PowerPoint slides from the webinar
The ability to ask additional follow-up questions after the webinar (recorded webinars)

And we are constantly adding new webinars to the list. If you have a new webinar idea email us at info@socialvelocity.net.

Financing Not Fundraising: Calculating the Cost of Fundraising
Recorded
$39

Key to any smart nonprofit financing strategy is an analytical approach to focusing on your most profitable activities. To do this, you must know how to calculate the cost of fundraising for every revenue-generating activity your organization engages in. This webinar will help you:

Calculate the return on investment of all your revenue-generating activities
Give you the net revenue raised and cost to raise a dollar formulas you need
Analyze which are effective fundraising activities and which are not
Articulate to board and staff why this analysis is important
Provide case studies of other nonprofit ROI calculations
Give you a process for analyzing and categorizing all of your fundraising activities

Download Now

Moving Beyond A Nonprofit’s Founder
Recorded
$39

Founder’s syndrome is a real problem in the nonprofit sector. It happens when the organization’s founder, or a leader who has been there for a long time, becomes the sole decision-maker. And even if a nonprofit isn’t suffering from founder’s syndrome, they likely don’t have a succession plan in place for what happens if or when their leader leaves. The lack of a succession plan or an over-reliance on a founder puts an nonprofit’s future at great risk. Nonprofits must learn how to vest leadership not in one person but in the broader organization. This webinar will help nonprofits to:

Determine if they are suffering from founder’s syndrome
Move organization leadership from one person to a more sustainable, diversified leadership model
Create an effective succession plan
Communicate the plan to funders and other external stakeholders
Integrate your succession plan into your strategic plan

Download Now

Financing Not Fundraising: Creating a Financing Plan
Recorded
$39

If you want to move your nonprofit from the exhausting hamster wheel of fundraising to a sustainable financing model, you need a financing plan to get there. This webinar will help you create an overall financing plan to bring enough money in the door to achieve your mission, including:

All revenue streams flowing to the organization
A strategy for funding programs and operations
Opportunities to raise money for infrastructure
Tactical steps with activities, deliverables, people responsible
How to divide tasks by staff and board members
Ways to monitor the plan going forward

Download Now

Leading Difficult Conversations with Funders, Board Members and Employees
Recorded
$39

Let’s face it, leading a nonprofit organization can be a very lonely, thankless job. And it often involves really hard conversations like telling a funder you can’t launch that new program, asking a board member to resign, correcting or firing an employee. But in an increasingly resource-strapped environment, your job demands more of these hard conversations. This very interactive webinar will give you tools to respond in these tricky situations. Participants can submit scenarios ahead of time, as well as during the webinar itself. Learn how to approach sticky situations in an assertive, graceful way, while positioning your organization to thrive. This webinar will give you:

Concrete language to use with funders, board members, staff and others
Case studies and examples of difficult situations
A process for thinking through future scenarios and focusing on what’s best for your nonprofit
A forum for putting your toughest situations to the test
The opportunity to hear what challenges other nonprofit leaders face

Download Now

Financing Not Fundraising: Creating an Earned Income Stream
Recorded
$39

This webinar builds on the earlier Financing Not Fundraising: Evaluating Earned Income webinar. It is intended for those nonprofits that have a business idea and are ready to pursue an earned income stream. This webinar, complete with case studies of other nonprofits that have launched earned income businesses, will show participants how to:

Pilot a new business idea
Find customers
Price products/services
Project future business income and expenses
Create goals for the business and monitor progress on them
Report progress on the business to the board

Download Now

Solving Urban Food Deserts: An Interview with Dennis Morrow

Nell Edgington — Tue, 07 Aug 2012 15:01:42 +0000

In this month’s Social Velocity blog interview, we’re talking with Dennis Morrow, the Executive Director of Janus Youth Programs, a multi-service nonprofit agency that works with children, youth, and families in Portland, Oregon and Southwest Washington. Janus Youth caught my eye a few months ago when Village Market, a nonprofit inner city grocery store they launched, turned a year old. Their solution to inner city food deserts fascinates me, and I wanted to learn more.

You can read past interviews in our Social Innovation Interview Series here.

Nell: What was the impetus for starting the Village Market in North Portland?

Dennis: In 2006 Home Forward (formerly Housing Authority of Portland) rebuilt the former Columbia Villa Tamaracks, Oregon’s largest public housing development, through federal HOPE VI Project funds. Renamed New Columbia, redesign plans included both subsidized rental units and moderately priced homes for purchase, a new grade school, a Boys and Girls Club, service buildings, and expansion of Janus’ Village Gardens Urban Agriculture Initiative to New Columbia. This expansion included a second community-run garden site, a second children’s garden club program, and an orchard. The new community center included a park, office/community room space for services, and space for a privately run “main street” grocery store that operated for approximately 2+ years before closing.

As Village Gardens continued to expand leadership opportunities for residents in New Columbia and the adjoining low-income Tamaracks Apartment Complex (also a Home Forward property), residents and garden leaders voiced the need to reopen the local grocery store selling healthy, fresh, culturally relevant food (no alcohol/tobacco/lottery tickets) in New Columbia where 33% of the 3,000+ residents lack personal transportation and faced a 45 minute bus ride each way to the closest grocery store. These community members also had a vision that the store could be community-run and could provide additional employment opportunities for teens/adults. They also saw the store as a central meeting place for the exchange of information (focused on healthy eating/healthy living) and a community meeting place for New Columbia’s diverse residents.

Janus had worked in and with this North Portland community for over 15 years and had established ourselves as trusted partners who see our mission not as “doing for” or “doing to” but rather “working with” the community to realize the vision they have for their neighborhood and their families. Both Home Forward and the surrounding community specifically asked Janus to assume a leadership role in planning and overseeing the development/operation of the Village Market. With support from Janus’ Village Gardens staff, Janus’ Administrative Team and the Janus Board, New Columbia leaders spent nearly two years researching/surveying the community on the products that would be important to sell in the store, interviewing potential vendors, developing a business plan, and designing the store’s layout which included neighborhood murals. In 2011 after having secured foundation/public funding for start-up and operational capital, the Village Market was opened as a non-profit, community-run healthy corner grocery store.

As with every new initiative of Village Gardens, the impetus for the store came directly from the resident community’s expressed needs and desire.

Nell: The grocery store industry is a really competitive one. Do you think being a nonprofit store, instead of a for-profit one, puts you at a competitive advantage? Why or why not?

Dennis: There are definitely both pluses and minuses to our nonprofit status. The advantages it creates is that it was possible to secure public and private funding (literally worth over $800,000) for start-up and initial operational costs because of the programmatic issues also being addressed by the store including community health, employment for low-income teens and adults in an economically challenged area of Portland, community development/revitalization, social impact, and public safety. It has become a positive symbol of success for the community and in the community. What we do not know yet is the degree to which being community owned/managed and a nonprofit actually impacts on consumer behavior: do folks actually shop with us because of that? Our Store Advisory Committee is in the process of beginning customer and neighborhood surveys to answer this question more directly.

One disadvantage of being a non-profit operation is that there are very few models of success nationally to draw on. As a nonprofit youth-serving organization, running a retail business is also not part of our corporate skill set. We have a very good consultant who works hard to “train us” into the intricacies of successful store management. Ultimately, however, it is not the nonprofit status which represents our greatest challenge—it is the “healthy food” concept. The grocery industry is very competitive and, in a largely low income community, also very price sensitive. Margins on products/sales need to be much tighter than in a traditional store, and there is a smaller product mix due to space limitations. This makes it essential to have the right products on shelf so product moves, to manage inventory control very tightly, and to track pricing very closely. Featuring organic produce, for instance, instead of beer is a much more significant challenge in terms of shelf life and spoilage. Eliminating sale of alcohol/tobacco products and lottery tickets essentially removes the primary profit generators from a traditional convenience store. Essentially this puts us at a competitive disadvantage with for-profit stores but the disadvantage is not in being a non-profit but in being a small, organic/healthy food store.

Nell: One year in, it looks like Village Market could be a model for solving the growing problem of food deserts in poor, urban areas. Do you think your particularly model could be a solution to this growing problem?

Dennis: We do not believe there is a one-size-fits-all solution to food deserts. The Village Market offers one potential road map. But remember, the essence of Village Market is that it was “birthed by” the community—not Janus, not Home Forward, and not some federal grant program. We trust each community to find solutions that will work for them—but in order to do this, you have to have an incredible faith in people who live in that community. We also refer to Janus as the “vehicle” through which the Village Market vision was made real, not the “owners” of the Market. A study was just completed by the Oregon Public Health Institute on Village Market which details out the various elements that have gone into its success so far, and this study could be a guide for other communities exploring these issues.

One element which does excite us is the core concept that the Market is much more than a store. It is a community hub where neighbors can gather, it is employment opportunities in a neighborhood where there are few, it is an educational program serving as home base for a team of Community Health Workers, it promotes inter-generational growth with a “Healthy Kids Snack Corner” designed by children from the neighborhood school, and it represents a beacon of hope that the community can thrive.

On the other hand, we are not yet a solution because we do not yet know for sure if the model is sustainable over time. Sales have gone up every month for the last seven months—but due to the lower profit margins inherent in the healthy food concept, we are still “living” on our start-up subsidy funds. The outstanding question now is whether a store like this can self-sustain or whether it will require some form of ongoing subsidy. If a subsidy is required, then there is a major policy issue of where it should/could come from—in essence, who will step up to provide the irrigation necessary to turn a food desert into an oasis?

Nell: How do you integrate Village Market with the other core homeless youth work of Janus Youth? Have you ever been concerned that the market might distract the organization from your mission?

Dennis: Janus’ organizational mission is to “be a leader in creating innovative community-based services that enhance the quality of life of children, youth and families by working in partnership with others to create a safe and healthy community.” We are actually not a homeless youth service agency but a multi-service agency for children, youth, and families. Janus operates over 40 different programs at 20 different locations including long-term residential treatment, a full continuum of services for runaway/homeless youth, home visiting/parent training for teen parents/infants/children, a youth scholarship fund, and Village Gardens. Our organizational chart is actually a tree reflecting different branches of service with each leaf being an individual program. The Village Gardens limb actually has several leaves besides the market including two community garden sites, a community health-worker project, a flock of organic hens, and an organic farm run totally by teenagers. The Village Market is a “stretch” for Janus, but it is a natural leaf on the Village Gardens limb—and when we were asked to be the vehicle for this community vision, our mission clearly tells us that is exactly what we should do. Each of Janus’ “limbs” of service operate with a high level of autonomy but with a core set of values based in Safety and Respect: creating a Safe environment for staff, youth, and families to grow, learn and heal and building Respectful relationships with others which empower them to find effective solutions for themselves. So the Village Market does not so much “integrate” with our mission as it “fits” within our mission.

Nell: The Village Market was obviously a big risk for Janus Youth to take on. Were board and staff initially concerned about the risks and how did you overcome those fears?

Dennis: This type of venture represents a huge risk to any organization. Our leadership staff and Board were extremely concerned particularly around the financial area. Starting up a new business requires substantial start-up capital as well as subsidized operational capital for an initial period of time. One of our Board members owns a business consulting firm, and he personally worked with the community planning team to build a sound business plan. This plan also had substantial input from our “grocery store consultant”. We then worked with Home Forward to solicit funding for the business plan and were successful in raising over $800,000. Home Forward contributes free rent and utilities as part of their investment. The Board approved opening the store based on two parameters: 1) We would not open until all of the start-up/operational capital in the business plan had been raised; and 2) Once open, we will operate the store as long as it does not require a subsidy from Janus. We were successful in meeting “1” and are now in the process of testing out “2”—but the Board is clear that we cannot afford to drain resources from other program areas in order to support ongoing operation of the store. Either it will reach a “break-even” point as a stand-alone business or we will need to find the operational subsidy necessary to maintain it on an ongoing basis.

What’s Holding Your Nonprofit Back From Raising More Money?

Nell Edgington — Tue, 12 Jun 2012 15:39:32 +0000

It is the ultimate question for many nonprofit leaders. But often one that they can’t answer on their own. Perhaps because nonprofit leadership may be so mired in the weeds, or so used to doing what they’ve always done, or simply lack fundraising expertise or knowledge of new trends and tools. The end result is that they simply can’t figure out how to raise money in new and better ways. Which is where a revenue assessment can turn the tide.

Let me give you an example.

Institute for Human Services (IHS), a large social service agency for homeless men, women and children in Honolulu, Hawaii, enjoyed success in government grant funding, but had been unable to diversify their funding as much as they would like in individual and corporate areas. At the same time, their small fundraising staff was over capacity and struggled to keep up with the volume of work. The board of directors was eager to help fundraise but didn’t know the best way to get involved.

The organization knew they had the opportunity to raise more money, but didn’t know how to prioritize their resources to do so.

IHS hired Social Velocity to conduct a revenue assessment to find opportunities for growing their funding. I interviewed board, staff and external funders to get their insights about fundraising at IHS. Then I reviewed organization financials, materials, technology, staffing, planning, and other processes. From this analysis, I wrote a 30-page analysis with specific recommendations for improving fundraising in each revenue area and presented my findings to the staff and board.

With Social Velocity’s revenue assessment, IHS has hit the ground running making improvements to their fundraising function. They have already hired a new Development Director who has been able to shoulder more of the responsibility for fundraising, freeing the Executive Director to participate in more donor relations activities. They are looking forward to reviving past donors through more targeted fundraising strategies, caring for existing donors and creating broader opportunities for constituents to support the mission more personally. The staff and board are energized by the specific fundraising role and responsibilities I outlined for them. The assessment really turned the tide for them, as executive director Connie Mitchell explained:

The analysis and recommendations turned on the light bulb for me about how an investment in one key development staff could multiply our results over a short time. We’re also confidently using our resources more wisely for a better ROI when it comes to fundraising tools and media strategies.

A revenue assessment is for nonprofit organizations that know they want (or need) to raise more money, but don’t know how to get there. Here are the steps I go through in a nonprofit revenue assessment:

Interview Stakeholders. I conduct in-depth, one-on-one interviews with the executive director, key staff, key board members, and key funders and other external constituents to understand what is working and what isn’t.

Review Documents. I analyze all organization documents, policies, procedures, financials, systems, and materials to understand the internal and external processes for raising money.

Assess Organization. I look at 6 elements of the organizational structure (mission and vision, strategy, operations, etc) to determine how well they contribute to fundraising effectiveness.

Analyze Revenue Streams. I look at all current and potential revenue streams to uncover opportunities for increases.

Review Fundraising Infrastructure. I review all aspects of the organization’s back-end functionality for raising money (such as donor database, materials, systems, technology) in order to uncover areas for increased efficiencies.

Deliver Analysis and Recommendations. I write a 15-20 page detailed analysis with recommended actions for increasing funding streams.

Present Assessment. I present the assessment and recommendations in-person to staff and board for questions and discussion.

It doesn’t have to be so hard. A revenue assessment can give you a clear road map for moving your organization from financial insecurity to long-term financial sustainability.

To learn more about Social Velocity’s revenue assessment, check out our Revenue Assessment Consulting Service, or email us at info@socialvelocity.net.

Photo Credit: Julia Manzerova

Is Earned Income Right for Your Nonprofit?

Nell Edgington — Wed, 09 May 2012 14:28:31 +0000

Earned income, or the sale of goods and services, is a somewhat misunderstood and unexplored financial opportunity for nonprofits. Yet there are countless examples of nonprofit organizations that sell goods or services to supplement their revenue, like the Girl Scouts, Goodwill, museum gift shops, hospitals, charter schools.

If you’ve ever wondered if earned income might be an opportunity for your nonprofit to raise unrestricted revenue, download our “Evaluating Earned Income” webinar. This webinar is part of our ongoing Financing Not Fundraising webinar series that shows nonprofits how to create a more sustainable financial engine for their organization.

Earned income is not right for every nonprofit, but every nonprofit should at the very least analyze whether earned income is a potential opportunity.

This webinar will help nonprofit leaders:

Understand what earned income is and when it is most successful
Learn about other nonprofits and their earned income businesses
Evaluate whether earned income is a possibility for their organization
Determine if their organization is ready to explore earned income
Understand the steps in launching an earned income stream

Evaluating Earned Income Webinar
Recorded

The registration fee will get you:

A link to a recording of the webinar, which you can watch as many times as you like
The PowerPoint slides from the webinar
The ability to ask additional follow-up questions after the webinar

Download Now

And if you missed last month’s sold out Raising Capacity Capital webinar, we are did repeat of that webinar. Capacity capital is the money that every nonprofit needs, but most find so hard to raise. Capacity capital can help your nonprofit to:

Hire a development director
Launch an earned-income stream
Expand your programs
Evaluate your impact
Train your staff

It is money for infrastructure and organization building. If you want to move your organization out of the starvation cycle, you have to learn how to raise capacity capital.

The Raising Capacity Capital webinar will show you how to:

Talk about the importance of capacity capital to your donors and board
Create a budget for the capacity dollars you need
Break the goal into donor ask amounts
Identify prospective donors
Give your board a role in the campaign
Gain the confidence to start asking for the money you really need

Raising Capacity Capital Webinar
Recorded

Download Now

Photo Credit: www.girlscouts.org

Tools to Build a Stronger Nonprofit Sector

Nell Edgington — Thu, 26 Apr 2012 14:58:24 +0000

A little over a year ago I started introducing tools on the Social Velocity web site to help nonprofits, who might not be able to afford consulting services, grow their programs, create a financing strategy, revamp their board. I am blown away by how popular these tools have become.

I started Social Velocity almost four years ago because I saw a real hole in the nonprofit sector. Small and medium nonprofits working on social change lacked access to expertise and resources to strengthen and grow their solutions. The Teach for Americas of the world were building impressive organizations and replicating their solution far and wide. But they were doing so with the help of deep networks of experts and money. They were the lucky ones.

But there are equally impressive solutions housed in much smaller, less resourced nonprofit organizations that aren’t really seeing the light of day. Because these organizations don’t know how to put a growth plan together, figure out how to finance the impact they want to have, or create a compelling ask for money to build, their solutions are not reaching as far as they could.

Social Velocity exists to help those small and medium-size nonprofits who want to be entrepreneurial, grow their programs, get their board engaged and invested, raise money to build their organization, break out of the starvation cycle.

And there are some nonprofits that are so small or so new that they aren’t ready yet for a customized solution. So our tools are there to help them start creating momentum on their own.

Our Step-by-Step Guides help a nonprofit to:

Create a theory of change, which is the fundamental backbone of any nonprofit effort to get more strategic and garner more external support.
Develop a case for support, a clear, well-articulated, compelling argument for why a donor should give to your nonprofit.
Craft a sustainable financing plan, that lays out how enough, sustainable money will flow through your doors to support your mission.
Create a business plan for an earned income venture to result in new, unrestricted revenue for your nonprofit.

And the E-books we have developed describe:

How to move from the exhausting hamster wheel of fundraising to a more strategic, sustainable effort to finance your nonprofit, and
How to create a groundbreaking board of directors that can strengthen and grow your impact

And our Monthly Webinars describe how to find individual donors, evaluate earned income potential, create a message of impact, raise capacity capital and much more.

You can learn more about all of our tools here.

I’m committed to continuing to expand our inventory of tools so that more nonprofits can strengthen and grow their impact. So I’d love your ideas for other tools you would like to see.

Where do you struggle and where do you need guidance? Let me know the kinds of tools you would like to see in this post’s comments, on our Facebook page, or via Twitter or email.

Photo Credit: Andrew Morrell Photography